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Can the Stock Market still Bounce Back after Covid-19?

Are you looking for resources regarding the current performance of the stock market these days during the pandemic? If yes, then it is best that you les mer on the next lines on this column.

The stock market has actually raised questions and concerns throughout the Covid-19 ordeal. As a matter of fact, there are evidences showing that shareholders favored less vulnerable companies and that the government guarantees and credit facilities have lowered the policy interest rates while the lockdown measures helped in mitigating the plummeting of stock prices. On the other hand, the basics just talks about the small part of stock market variation at country level.

Everyone should still be on Full Alert

On June 8, 2020, WHO had announced that Covid-19 was only getting worst and warned the world against complacency as many more people would still be vulnerable to infection. On the same day though, the US stock market started its 4th consecutive week of rally. What new patterns and insights on stock market may be drafted from Covid-19 pandemic? Basically, this is a topic that should be given further attention. Moreover, this is only adding to the negative connotation of the general public towards stock market.

As of this moment, there is a fast-growing body of experts doing research and studying the responses of the stock markets towards the virus, which is somehow, giving valuable insights. While the dynamic of stock markets throughout the outbreak may seem to be so irrational, random or even crazy if you look at it at first glance, take a closer inspection and you’ll notice that they didn’t blindly react to it actually.

Just another Challenge

There have been a number of studies showing that the stock markets work so effectively in trying to protect the most vulnerable and exposed companies; firms that were financially fragile, subject to disruption of the international value chains, less resilient to the social distancing implementation or vulnerable in regards to corporate social responsibility. In addition to that, it looks like that the losses on the stock market are closely related to the forecasted revisions of analysts, at least in medium term.

Fact is, everyone was surprised by the move made by the US central bank by announcing that it’ll be buying the lowest investment bonds as part of its effort of quantitative easing program in order to save jobs and at the same time, stimulate investments.